South Jersey mall operator files for bankruptcy protection
Two mall operators filed for bankruptcy protection Monday, hurt by the coronavirus pandemic that has forced their tenants to permanently close stores or not pay rent.
Both companies, CBL and Pennsylvania Real Estate Investment Trust (PREIT), said their malls will remain open as they go through the bankruptcy process.
PREIT, based in Philadelphia, has more than 20 properties, including Cherry Hill Mall, Moorestown Mall and Cumberland Mall in Vineland.
Even before the virus, malls have struggled to attract shoppers who are increasingly shopping online or elsewhere. But the pandemic forced many of them to temporarily close for months.
Mall tenants, which operators rely on for rent payments, are also stressed. Some are going bankrupt and closing stores, such as department store chain J.C. Penney.
The two bankruptcies come just before the crucial holiday shopping season. With reported coronavirus cases rising, malls will need to limit crowds during what is traditionally their busiest times of the year. At the same time, big retailers that didn't have to close during the pandemic, such as Amazon, Target and Walmart, are benefiting as they push people to shop online.
CBL, which operates 107 malls, said more than 30 of its tenants have filed for bankruptcy protection this year and are shutting stores, including woman's clothing retailer Ascena, which has 100 Ann Taylor, LOFT and other stores in CBL malls. Based in Chattanooga, Tennessee, CBL operates malls across the U.S., including EastGate Mall in Cincinnati and West County Center in St. Louis.
Like other malls looking to attract shoppers, PREIT has added restaurants, movie theaters and gyms to its malls in recent years, which now account for about 24% of its tenants. But those establishments have been hit harder by the pandemic and have stricter rules on how many people can visit.
PREIT said more stores are paying rent now than earlier this year, but it still expects its revenue from rent to continue to suffer as long as COVID-19 affects "the return of customers to malls."
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